Move Where Cost of Living Is Low

When living on a budget, there are circumstances where it might make sense to move to a location that makes living more affordable. Living in Manhattan, for example, can be a struggle for anyone earning under six figures of income each year. It’s possible, of course, but other areas of the country offer better housing options for the same amount of money.

There are trade-offs. New York City is a world-class metropolitan area, offering the best in art, music, food, and finance in this country. To take advantage of these benefits, if they are important to you, you’ll need to pay up to live here. The average home listing price in the TriBeCa neighborhood of the city is $4.2 million, and that’s not even the most expensive neighborhood.

Would you consider moving yourself and perhaps your family to better secure your financial future through lower costs of living?

A dual-income couple without kids and an AGI of $74,443 in Milwaukee can afford a median standard of living, according to the Tax Foundation report. That still puts the couple in the top 20 percent of taxpayers, giving them a tax liability of 8,081, or about 10.9 percent of their AGI (otherwise known as their effective tax rate).

To afford the same standard of living in Orange County, California, the couple would need an AGI of $100,079, putting them in the top 10 percent of taxpayers with a tax liability of $14,506. That represents 14.5 percent of their AGI.

And if they move to New York City, they’d need an AGI of $162,974, putting them in the top 3 percent of taxpayers and giving them a tax bill of $31,139, or 19.1 percent of their AGI.

Is this reason enough to convince people to move away from metropolitan regions like Los Angeles and New York? Perhaps it is for some people. There are benefits to living close to international hubs, including exposure to diverse culture, proximity to the best music, art, and food in the world, and large, close-knit communities and subcommunities. For some people, this is worth the extra expense.

If you want to move to the place where your dollars can make the most of your living, consider these areas:

It could be worth it to move if you have kids. The same jobs paying a couple 74k in milwaukee doesn’t neccessary pay $162k in NYC, so there is the extra pressure of working harder/longer/ to earn more money, which could mean having less time for your family. Recently, one of my friends have decided to move away from high cost NYC, all the way to Singapore.

It’s interesting you mention this now. I’m currently weighing a decision I have to move from Denver to either the Los Angeles or Dallas areas. Both are major metro areas, but they have very different costs of living. Anyone have any input on things to consider when I make this decision?

LA’s cost of living is astronomical whereas Dallas, TX is affordable but ridiculously hot. I would choose LA for weather, activities and the environment. However, Texas is more economical. It is up to you in the end!

We live in the suburbs of DC. Interestingly enough, in the past 1-2 years, we have had 4 friends & their families move to Dallas. 3 from DC area, 1 from LA area. 2 friends & their families moved to Denver (both from DC). And one friend move from Dallas to Denver.

In most cases, the decision was made due to growing families and the rising cost of living in the respective areas. Its one thing to live in a condo or small townhouse if you are a couple. But with multiple kids, buying a single family home became too difficult (either pay way too much, or have to commute way too long).

I travel to Dallas for business quite often so I know what that market is like and too be honest, I think they are making the right decision for the short and mid-term. In the long run, it pays to stay in the high cost areas. Remember, these moves are one-way moves. Once you go to a low cost area, you can never come back.

I have had a few friends move away from here (about an hour north of NYC) to lower cost cities. The big destinations right now, it seems, is the Austin area and the Raleigh area. Everyone that I know that moved to those places is gushing about it so far and we are actually considering moving at some point also. Our problem is that our family is all in the northeast, but it is just getting ridiculously expensive to live here.

We’re moving from Manhattan to Atlanta, GA. I’ve got a relocation package for this move, so no major out of pocket costs for me. It’s a lateral salary move, but the lower cost of living is going to be a huge difference.

It’s just too expensive in the Northeast to raise family. If I didn’t have kids, I’d be able to afford it, but being a first time home buyer, it’s just not working for us.

I remember when my friend got a job in NYC right out of school that was paying him over 70k a year, and just being amazed that he could get that salary right off the bat. But then I did a comparison using a cost of living site similar to the one FMF listed, and saw that all of his money wouldn’t really buy all that much more than my salary would down here in Raleigh/Durham (so yeah, RS, you’d probably find some savings!)

My husband and I did just this a few years ago when we got married. We both had pretty high paying jobs in Silicon Valley, but we wanted two things: to own a house and to have someone [me] stay at home with the kids. And that wasn’t going to happen there.

He grew up in Austin, TX, so it was a natural for us to look there for a job for him, and then a home. And it was nice to buy a nice home down here for not significantly more than the cost of a decent down payment for a crappy house out there. Oh, and without the income tax. Oh, and without having to pay hundreds of dollars a year to renew the tabs on my car. Oh, and … California is expensive. Texas is not.

The loss of my — not inconsiderable — income has been hardly felt, and our savings has never been better.

For professional reasons, such moves may be difficult for some of us during our careers. But, with few Gen Xers and Yers likely to get any meaningful social security benefits, pensions, or retirement health benefits, whatever income we generate from our assets must be utilized efficiently.

Accordingly, I suspect many of us will seriously consider a move to a locale with a lower cost of living during retirement. I’ve been following this phenomenon as I see more and more relevant articles and sites like escapeartist.com; I’d be surprised if more retirees don’t opt to live outside of the U.S., e.g., in Mexico, Nicaragua, Panama, and Costa Rica. With more and more expat communities abroad, it’s not as outlandish as it would have sounded to previous generations.

We considered moving from NYC area to Philadelphia at one point, but decided against it. My wife’s industry is in NYC and we love NYC. So our compromise was NJ. Also, in the three examples, you get much less living space for your money in NYC than in Milwaukee. $1million might buy you a 800 sq ft one bedroom apartment in NYC while the same amount will get you a 4000sq ft 4 bedroom house in Wisconsin.

If moving to Texas to save money, Austin is by far the best choice for people coming from culturally diverse large cities. No other Texas city even comes close! UT is a killer university, art and music are everywhere, tons of great restaurants, lots of outdoor activities, et cetera. Austin is truly the “middle coast” of the USA! Unfortunately, word is getting out. Real estate is EXPLODING and is predicted to continue for much longer. Get in while you can, enjoy, be happy, and make money.

Second best choice is Fort Worth. It’s a “grown up” Austin with more big-business flavor and rustic Texas style. Plenty of *world-class* museums, galleries, art shows, an elaborate botanical garden, and one of the nation’s best zoos. Like Austin, it’s a mellower, people-friendly place. Downtown is lively and fun every night. Don’t move here if you’ll be commuting to Dallas on a daily basis, however. It’s an hour each way, minimum.

Third overall choice (and #1 for value) is the mid-cities area which lies directly between Dallas and Fort Worth. The cities within this area (Hurst, Bedford, Euless, Colleyville, Southlake, and Grapevine) offer safety, convenience, good schools, and close access to D/FW International Airport, two water parks, and Six Flags. Being in the middle of the metroplex offers the best of what Fort Worth and Dallas have to offer at an unbeatable price.

From here on down, life is more about “survival” than “enjoyment”:

Next is a toss-up between San Antonio and Dallas, both of which are fairly dysfunctional. San Antonio is dominated by tourism and a transient population without offering much substance for locals. Crime rates are high and job opportunities are low. Nice place to visit… wouldn’t want to live there.

Dallas is a mixed bag. It all depends upon your financial condition. If you’re in the money, you’ll be able to buy an enjoyable status quo. Otherwise, Dallas will eat you and your children for breakfast with a side of spam and eggs. No joke… Dallas has been the #1 murder capital of the USA for seven consecutive years. Consider this: People who can afford to live in splendid University Park or Highland Park enjoy exceptional public schools, a private police force, a separate water supply (!), fantastic restaurants, and some of the best and most exclusive shopping in the southwest. However, outside of this magical little paradise, everyone else is forced to contend with hideous DISD public schools that resemble prisons, roving gangs, excessive burglary, and a nightlife scene (Deep Ellum, Lower Greenville) that is fraught with opportunistic muggings. And with the recent fallout from hurricane Katrina, it’s only getting worse. Bottom line: Unless you can afford a nice neighborhood and private schools, don’t even THINK about moving your family to Dallas. Want proof? The crime stats at Dallaspolice.net should provide sobering evidence.

Fifth would be Houston… a huge, sprawling, smoggy, unhealthy city with extreme humidity, urban unrest (not counting post-Katrina!), and traffic snarls across the entire city. Still, it does have Rice University, a great museum, and is relatively close to the coastline. Unless you’re getting filty rich here, avoid it.

Amarillo, Midland/Odessa, El Paso, Lubbock, Abilene… not recommended. Only for small-town types. If you’re reading this blog, you probably aren’t one of them.

Cheers! And remember, money is only a means to an end. It’s all about family, friends, good health, and “quality of life!” :)

“Amarillo, Midland/Odessa, El Paso, Lubbock, Abilene… not recommended. Only for small-town types. If you’re reading this blog, you probably aren’t one of them.”

Um, I live in a very small town & read this blog. I am in CA now, but originally from Texas, having lived in several small towns there plus Houston, Austin, the Dallas area, and Midland. Austin is diverse, but IMO has outgrown itself & we were glad to leave there in the mid-1990′s.

We’re doing the cost of living comparison for retirement purposes too. Most of the online calculators seem to assume one would be buying a median-priced home, which heavily skews the results. Removing that from the calcs often means the other expense categories essentially cancel each other out, but you have to be sure they’re including property/state income & other taxes. Just not having a state income tax doesn’t help if the state & local sales or property taxes are higher instead. If you find a calculator that gives all the details of the prices they’re comparing, it’s more helpful as there are some categories you might not be spending on.

I cant find what the answer about about cherokee county, NC or Asheville, NC. Expensive or cheaper to live, High or low federal/states taxes, climate hot/humdity? cold/snow, Hurriances? best retire to live and more.. What do you think of these county, city or town?

My boyfriend and I relocated from Dayton, Oh to Cleveland where he’s originally from. And aside from the winters, I love this place. There are still nice neighborhoods where rent is cheap, never mind that we were able to buy a house(though some weird stroke of luck) for less than $20,000 but the kids were looking to sell the house ASAP. We’re less than 15 minutes away from downtown by hwy, 20 mins by side roads. We have one of the largest public markets, awesome museums, the rock hall, 3 major sports teams( though I’ve rooted for Cincy all my life), the zoo and some amazing restaurants.

As with any “Top 10″ Lists, you are going to have people say “Why didn’t you choose this city or that city?”, so I have to throw in my two cents – why didn’t Oklahoma City or Tulsa make the list? I lived in OKC for nine years and for a good chunk of that time, my ex-husband made no more than $40k a year and we had a nice home in the ‘burbs and three kids and I stayed home with them. We lived well.

Fast forward to present time: I have to disagree with Nick on his summary of the Dallas lifestyle. I’ve been here 5 years and lived in Houston for the same length of time. Houston has an amazing arts community, and is very culturally diverse. Apart from the gross summer weather (which, by the way is what movie theaters and shopping malls are made for), and the nasty traffic on 59 at rush hour, it’s not a bad place to live. Dallas is becoming internationally known for its professional sports teams apart from the Cowboys, has great shopping, and some of the nicest suburbs around. I happen to live in one. Housing prices are reasonable, there are several world-class universities to choose from, and the people are cool, generally speaking.

I will agree with Nick – Austin is marvelous. Maybe someday I’ll live there too. But I grew up in California and wouldn’t go back. I couldn’t afford to go back anyway. And a word to the wise: don’t move to Waco.

Everyone in New Jersey is thinking of moving—-cost of living is through the roof. But, there’s the access to New York and Philly, the Shore, the close flights to anywhere, and the lack of extreme weather phenomena. I’m staying, for now.

Since I have only lived in Los Angeles and New York/New Jersey, I may be biased. I feel there are always trade offs with any city. The big cities are more expensive, but the wages are higher. The smaller or less expensive areas are nicer, but less jobs and lower pay. Large cities offer a variety of things smaller areas do not. It is a matter of choice. What kind of life do you want?

While my kids grew up we lived in Germany, New Mexico, Florida, Virginia and Idaho, due to the requirements of the Air Force. Some twenty years later both of our kids have said that the best place we lived was Idaho. It was also the place with the lowest cost-of-living for the ordinary expenses incurred, although New Mexico was also fairly inexpensive. The extra disposable income in Idaho allowed us to buy a tent trailer, camp, take longer vacations and generally enjoy the country. The place they liked the least was Virginia, which was the most expensive and therefore most restrictive as far as disposable income. Although Virginia is beautiful and offers variety from beaches to mountains we just had a tougher time enjoying it. Ironically I was born in Virginia, but my parents moved everything to Miami when I was six months old. My Mom said she told my Dad and Brother that she was so fed up with the winter weather (she grew up in Miami) that she was going south whether or not anyone came with her! – I think she was kidding – maybe. Cost-of-living may be important but it’s not the only important consideration – to each his own.

+1 for Nick’s comments about Dallas and surrounding areas. Mid-cities between Ft. Worth and Dallas are not bad, as suburbs go. I lived in mid-cities for a few years years, and while it wasn’t for me, it wasn’t unpleasant. It was just too hot, conservative, and bible-thumpy for my taste. It’s not a very outdoor-activity friendly place. But if you are considering the Dallas area, do NOT move to the city of Dallas unless you have gobs of money. Move to mid-cities. I lived in Dallas also, and found it a horrifically crime-infested, corrupted city. Traffic is a nightmare. Drugs and crime are rampant. The corruption in city employees is unbelievable. The air quality is among the worst in the country. The Dallas school district has its own police! Check the crime statistics and read some local papers before moving into this city.

I enjoy living in the Midwest in Indiana and could do without the higher cost of living, but to each his own. I understand the trade-offs and am fine where I am. If I were single or without kids, then one of the higher cost cities might be worth it for the excitement and social aspect.

As long as you can get higher wages in that high COL area, it might be worth it if you save a large enough fraction of your income. E.g. if you would earn twice as much money in NYC as Bumfork, Idaho, but your COL would be 3x as much, if you save 51% of your income then you will put more dollars into your savings account in NYC. Of course most people spend 90% (or 100%. or more!) of their income so this idea is inconceivable to them.

I moved from NY down to NC with a massive drop in cost of living. You can find a place that has what you want (a few hours from mountains on one side, ocean on the other, less population, mellower people), and that is important. I feel like we have a much higher quality of life. The important thing is to find a place that can provide what you consider a high quality of life.

Ken, I’ve been looking into areas of NC. What my husband and I want is an affordable house with, hopefully a few acres or a massive yard. We love the quiet and privacy, plus we ha e 3to fogs! I would like rolling hills, but love the mountains too
I would REALLY love to be close to a river
Where for you suggest? One thing I worry about is crime because hubby is a long haul driver and not home alot (hence, my lovable mutts).
Everything sounds wonderful on city websites, but they want to showcase their area. What do I need yo know…..HOW do I find locations?

Nick – nice summary of places to live in Texas. I take just one exception to your comments – “Only for small-town types. If you’re reading this blog, you probably aren’t one of them.” I live in an extremely small town and I read this and other blogs every day. Although us “country bumpkins” don’t have daily access to museums, art galleries, eclectic neighborhoods and all the other city advantages, we also have a low cost of living, almost zero crime, friendly people, no dangerous weather patterns, fresh air and trees!

I can go to several small cities for museums, shopping, etc.with an easy 45 minute drive. My husband works in NYC (Manhattan) and I like to visit. It’s non-stop action, people everywhere and interesting things to see and do. But, I always like to come home too, where there is peace and quiet and I can “cyber-visit” any place in the world and read about finance, politics or any other subject from the comfort and safety of my small-town home.

Loved your information on Dallas, just wanted you to realize that not all small town folks are small-minded, lol.

when i first started working i lived in fort wayne, indiana where the cost of living was very cheap and it had a nice small town feel to it. Now I live in Scottsdale, Arizona where cost of living is higher but it’s such a great city. Quality of life is very important and while AZ has plenty of problems, there are many cities with a good quality of life.

Beware of relocating in the near term to anywhere that has suffered beyond the norm from real estate devaluations. This would include places like Nevada, California, Arizona, and Florida. Local governments have been raising taxes rapidly to make up for lost revenue, thus making what at first appears to be cheap living no longer cheap.

For the purposes of moving to a less expensive area for retirement makes all the sense in the world. Contrarily, living in a more expensive area while saving for retirement may make just as much sense. All things being equal (which they won’t be), if you make more money and save a fixed percentage for retirement, you will save drastically more in the long run. As my caveat mentioned, however, things are very unlikely to be equal in other aspects of your expenses. For instance, the Washington DC metro area is one area that has not been impacted negatively by the housing crisis. If you have a government job and move to DC, they will give you a cost of living adjustment (COLA), and private employers will do something similar. The percentage is probably fairly accurate (8% difference from my metro area to DC), but the housing situation is quite odd. A similar home in DC compared to my metro probably only 8% more expensive; the odd thing is that in the DC area, there aren’t homes that are equivalent to $90-180k range in my area… so, if I live in a $130k home, I will not be able to find a similar home and pay $140k ($130k * 1.08)… I will have to move to something very different to my current accommodations, be it lower or higher. For most people, it would be a non-decision… you have to have something equal to or greater than what you are accustomed. So, your income goes up by 8%, but your housing costs go up by 50% (moving into a $195k home that would be similar to a $180k home in the current area).

Each situation must be compared and evaluated thoroughly to make a proper decision. If I were “forced” into this position by my current employer, I might decide to not even move, but rather leave my family in our current home and find a very inexpensive place to stay during the week and then go back to my family on the weekends; I would have to imagine this would only be tolerable for a short period of time and then it would likely be detrimental to my relationships with all of my family members.

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